Chapter 15 Homework Question 4 (of 7) Time 4. 10.00 points Saving Rate (2012) (p
ID: 1119982 • Letter: C
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Chapter 15 Homework Question 4 (of 7) Time 4. 10.00 points Saving Rate (2012) (percent) 13.2 10.1 9.0 89 6.8 3.7 1.9 Country Switzerland Germany Netherlands Australia Czech Republic United States Japan a. If a German and an American both had $100, how many more dollars would the German save in 20127 b. Why are higher saving rates desirable? increased investment and faster economic growth. Higher savings lead to References Learning Objective 15-02 Describe what GDP per ca and GDP per worker measure Worksheet Difficulty: 2 Medium Check my workExplanation / Answer
Answer a : As both german and america had $100 with them and saving rate are 10.1% for german and 3.7% for america. In this scanerio it means saving for german is $10.1 where as saving for america is $3.7. Therefore, german saving is $6.4 ( $10.1 -$3.7) more than saving in america.
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(b) Higher saving rate lead to higher level of investment and boost productivity in an economy. There is a proper flow that when savings are higher than there is increased in investment resulted in higher capital stock as well as result in higher economic growth of the country.
Answer : a : Investment should be increased by 3% . It means at present the investment is equal to $2 trillion
So to increased GDp by 1% investment should increased by 3% in such a manner thatt
$2 trillion *3/100 = 0.06 trillion / 6 billion
It means that investment should increased from 60billion in this time period scanerio. So the present investment is equal to $2.06 trillion
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Answer : Here when the investment should increased than consumpation has been declined by the same percantage as according to the situation. So the present consumpation declined by 60 billion.
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